A former mining company boss did not tell shareholders about possible Obeid family links to a $500 million coal deal, despite suspecting they were involved, a corruption inquiry has heard.

John Atkinson, who was managing director of White Energy in 2008, on Tuesday gave evidence at an Independent Commission Against Corruption (ICAC) inquiry into whether former Labor minister Ian Macdonald in 2008 rigged a tender process for a coal exploration licence in the NSW Bylong Valley.

The ICAC is probing how another former Labor minister, Eddie Obeid, may have gained from the awarding of the licence to Cascade Coal.

The inquiry has been told that White Energy made a $500 million offer for Cascade Coal, a company linked to the Obeids, but the deal fell through.

The inquiry heard Mr Atkinson suspected the Obeids were involved in Cascade Coal, but he did not inform shareholders, company directors, or the Australian Stock Exchange of his misgivings.

"There was a real prospect that the knowledge of the Obeids would harm the company, wasn't there?" Commissioner David Ipp asked.

"Yes," Mr Atkinson replied.

"Why didn't you tell the shareholders, and the directors and the stock exchange? Mr Ipp then asked.

"I didn't see that as my obligation," Mr Atkinson replied.

The inquiry was told that Mr Atkinson, an original investor in Cascade Coal, stood to make millions of dollars from the deal between Cascade and White Energy.

It was also told that there was a "high risk" that the state government would not grant a mining licence over the coal-rich area if the Obeids' involvement was revealed, which would cause the value of the critical Mt Penny tenement to collapse.

"You didn't have the shareholders' interests at heart - you had your own interests at heart," counsel assisting the commissioner, Geoffrey Watson, suggested.

"No, I always had the White Energy shareholders at heart," Mr Atkinson replied.

Earlier, Mr Atkinson distanced himself from company letters sent on different letterheads to the NSW Department of Primary Industries in 2008 urging it to reopen a tender process for a coal exploration licence in the Bylong Valley.

"The only possible explanation for White Energy and Amerod sending the letters is that somebody wished to create the illusion there was more than one company out to exploit coal in the particular area," Commissioner David Ipp suggested.

"Was this part of White Energy's plans to use its subsidiaries and other companies in which its major shareholders had an interest to write letters to the department to create this illusion?" he asked.

"Not that I was aware," Mr Atkinson said.

Mr Atkinson conceded that it was "theoretically possible" that the letters were directed by members of a "syndicate" connected to White Energy, including John McGuigan or Travers Duncan.